Why a company wants to be listed in some market (NASDAQ or anywhere) I'm having problems to understand this. I guess on the initial offer they could get some money in that way, because they have 100% and they can sell those shares. But if the owner of the company thinks the company will be more profitable in the future, and hence increrase the value, why is selling the shares to the "market"? is not better the have always the 100%? Because they need money? and is not better to ask for some credit on banks instead of selling part of the company?
Can raise money, both equity and borrowings, much, much easier. Oh, and its a potential cash-out event for insiders.
If the company doesn't need the money and feels that they will be worth a lot more in the near future, then it's best to wait. Most companies bring their stock to market to raise money and lower risk. If they don't need the money, then it's basically a hedge. If they think the public values or think they can convince the public that the company is worth significantly more than they think it is, then it's a great time to bring it to market. Also, frequently the company will compensate early employees with stock and the employees eventually want to get paid.
hmm... yes maybe it's a way to have some quick money? because if the company is worth $1M maybe the annual return is $100K and selling 50% is a way to have 5 years instantly. But why is not better to ask for a credit to some bank for $500K instead of selling 50% of the company?
Because you have to pay a bank back. With stocks you can just stick it to the stupid bag-holders... and if you're good, ie dot your "i's" and cross your "t's"... you won't go to prison. Its a beautiful thing. https://seekingalpha.com/news/3358056-riot-blockchain-falls-sec-subpoena-part-formal-investigation MAGA
Back in the day corporation's went public (or at least stopped being private) all the time, even small ones, on regional exchanges. Now an "IPO" is some huge event that only happens on national exchanges.
Becoming a public company makes shares in that company highly liquid. Employees, early investors, and founders can sell stock.
Yes, I understand that making the company public allow to sell shares and get quick money from it. But my point is, if the company needs money, why is choosing to sell shares instead of asking for a credit? With a credit you need to pay interest yes, but if you think your company will value more, is not better to pay the interest and preserve the 100% than selling the 50% at a low value? Or maybe the advantage is to avoid the risk? even if everything goes bad they at least have the 50% sold at a good price?
Credit will come with covenants. Credit will come with maturities where you have to pay back your borrowings. Typically it’s cheaper to borrow from the fixed income market than issue stock, which is why so many companies have borrowed money to do stock buybacks. If a company is doing secondary offerings, it’s generally because the credit markets are tapped out.